Facebook and the media code on The Future, This Week

Intro From The University of Sydney Business School, this is Sydney Business Insights, an initiative that explores the future of business. And you're listening to The Future, This Week where Sandra Peter and Kai Riemer sit down every week to rethink and unlearn trends in technology and business.

Sandra So we're back, but we're not back.

Kai We're on a break. But we had to come back because today, as we're recording this on a Thursday, Australia woke up to big news.

Sandra Facebook did take the nuclear option in response to a proposed law that would force it to pay news publishers for their content.

Kai And has taken off all news off the Australian Facebook site, has banned Australian publishers and users from not only seeing but sharing any news items on its platform.

Sandra So that means that as of this morning, The Sydney Morning Herald, the Australian, The New York Times, The Wall Street Journal, and even satirical news websites were all gone off Facebook, as were incidentally the Bureau of Meteorology, and South Australia Health and Queensland Health and several Sydney Local Health Districts. So, nuclear.

Kai There's been a lot of private businesses, government agencies, charities been caught up in this ban, who all got their Facebook pages wiped and their posts deleted or hidden. So apparently, Facebook's algorithm that makes sure that no news appear on its site has done a thorough job and not just gone for news media, but anyone who posts facts, the opportunity for jokes here abound, so they really eradicate all the facts, making sure that they become the platform for misinformation.

Sandra And this is in response to legislation, which passed through the House of Representatives last night, and is expected to pass the Senate and become law

Kai Do you want to read out the name?

Sandra Yeah, it is the News Media and Digital Platforms Mandatory Bargaining Code. Just rolls off the tongue, doesn't it? And this would require social media platforms to negotiate with local media for any use of their content. So when a company like Facebook or Google, which are the two companies targeted in the initial instance, would want to publish headlines from these newspapers or summaries of their articles, or indeed even links to these news sites, they would have to pay a sum to the publishers.

Kai Yeah, and we thought we'd just sit down for a quick chat about all the different implications of this and the complexity of what this banning of news actually means. So we thought we'd start with the users, all of us who are on Facebook. So Australians get a bit of a blast from the past, get to experience what social media was like, before it became a platform for sharing commercial content and news, really. But the question is, what does it mean now that Facebook wipes a lot of, not just news media, but institutions who post facts on its platform, will we all become less informed?

Sandra Let's not forget that for Australia, stats do show that about 30% of Australians get their news on Facebook. And while some might claim that this means that people will now go outside of Facebook to look for news, they will go to the news publishers website to get their news, there is a very high likelihood that people used to getting news on Facebook will stay on Facebook and get their information about what's happening in the world from less reputable sources.

Kai Yeah, so that's really the question, isn't it? If you can't get the headline from news outlets, do you then go to other places to get that? Or are you just so used to getting your daily digest of what's happening in the world there and you just stay there? And the whole diet now has just become less nutritious, right? So that's the question to be seen. From a researchers point of view, this is actually an interesting opportunity to study that phenomenon. So there might be some good in that, to use this natural experiment to do some user research and see, do people actually change their behaviour, and will Facebook become less important in people's lives for getting the news, and become true social media again?

Sandra My fear is that this won't happen. As we know, Facebook has trained people for a very long time to consume everything within its ecosystem, and especially news and information. And we've seen this repeatedly in the context of US elections and other world events, so the likelihood that you will go to consume news about the upcoming COVID vaccine, for instance, in Australia somewhere other than Facebook is very slim.

Kai And the fact that Facebook has made this move seems to suggest that they would agree with you that they don't expect to lose many users or indeed their 'eyeballs', that they would defect to other sources. And Facebook claims that only 4% of all items that end up in users news feeds are actually journalistic news items. I mean, given that 30% claim that they get their news from Facebook also suggests that what people see as news goes far beyond the actual news from journalistic sources, which is, you know, part of the concern.

Sandra And it also highlights that whilst this might not be a very important source of content for Facebook, it is still an important source of content for users themselves.

Kai So why then has Facebook opted for the nuclear option and pulled all the sources and blocked everything in Australia?

Sandra Well, for a number of reasons, first, that Australia is one of the first places to take a stance on platforms paying news outlets for content. So what happens in Australia is seen as the test case for whether or not you can get these large social media giants to pay for news content. And that's not the only reason, let's not forget that Facebook claims that they are doing this because they believe that the law that is being proposed "fundamentally misunderstands" the relationship between their platform and publishers who use or share news content.

Kai And importantly, Facebook claims that it's being penalised for content that it doesn't actually control, that is being posted by its users, that they have no control over this, and that conversely, the news outlets would actually benefit from having the traffic routed their way when users post links and news snippets on their platform.

Sandra And Facebook claims that it directed about 5 billion free referrals last year, which it estimates is worth about 400 million Australian dollars to the industry.

Kai But we need to take a deeper look into how news is actually shared on Facebook, and also on Google, incidentally. And also what the law says, because there's some hidden complexity that gets glossed over in the media today. So I think it's worthwhile taking a look at what it actually says in the media code, in what is going to become law. Because it says under making content available, "for the purposes of this part, a service makes content available if...", and then there's three things, "A, the content is reproduced on the service or is otherwise placed on the service", or "B, a link to the content is provided on the service" or "C, an extract of the content is provided on the service". And I think the problem here lies with option B, that a mere link to content would actually constitute making content available and therefore incur a payment. And I think that's what has drawn a lot of criticism.

Sandra And we'll include in the shownotes a link to an article written by the father of the internet, Tim Berners-Lee, who criticises the law for undermining one of the fundamental principles of the Internet, and that is the free linking between pieces of content online. And indeed, the ability of people to link content that exists on the Internet has been fundamental to developing the Internet that we have today, and anything that would limit the ability to do so would undermine how the web fundamentally operates.

Kai And I do think that that is a real problem. And it also fails to address the real issue here. Because there is an issue with platforms such as Google and Facebook appropriating news, journalistic content, for their own purposes. But a mere link, in my view, doesn't really pose such a problem. Because if I have a link, then the only way that someone would engage with this is going outside of the platform, and indeed going to the news outlet, which is what news publishers would want.

Sandra So there is a difference between the act of sharing a link as an ordinary user, and these platforms surfacing links as part of the news content that they provide on the platform.

Kai For example, if I post a link, and the platform draws in the picture, the headline, and the little summary blurb of the news article, therefore, actually shares an extract that a user could then read, be informed by, and then scroll over and never actually click on the link. I think that's the actual problem that needs to be addressed here, and what Facebook and these platforms really benefit from, sharing these news snippets, filling the newsfeed of people with these snippets, therefore informing users and users feeling well-informed, but no traffic will ever end up on the actual news sites. So that's what needs to be addressed. But a mere link, I think, poses a real problem, and makes the law much less useful and defensible.

Sandra And to be fair, there is precedent to the law that punishes platforms for using part of the news articles. In France, Google agreed to pay publishers to have their news showcased or to surface longer snippets of the news, in a response to a law that required tech companies to pay French media for using components of an article. And similarly Google has chosen in Australia to take a very different stance to Facebook, in that it engaged in negotiations with government and then agreed to pay media companies for use of their content.

Kai And that, to me shows a real difference between how Google and Facebook actually engage with news. Google provides its Google News Service, a curated service where you can be informed with headlines and news extracts. And Google has now agreed to actually pay publishers for this. So they are engaging with the law in a constructive way. At the same time they say, and I think they have a point, that a mere link in the search results shouldn't count, they shouldn't have to pay for that, and I think that's reasonable. But they're engaging with this because they're providing a news service. Facebook, on the other hand, treats news much like any other content, as materials to engage its users and optimises for data extraction from users and to sell them advertising. So for them, news is just any kind of material, and they seem to have decided that it's not worth paying for that because they have other stuff that engages users to be able to drive its engagement advertising business model.

Sandra And I think that that actually highlights a very important point in that this law would go a long way towards addressing the market power imbalance between the large platforms and news organisations, media corporations. On the other hand, it does nothing to address the side effects of the algorithmic business models that a company like Facebook has, in that such companies have, for instance, completely changed the way news is consumed, and the way news is produced. So training individual users to look for instance, for more visual content, for video content, for very short form, content, and so on. The fact that now most users are used to very short snippets of information that are consumed together with other snippets that are pure entertainment, does not improve the power of media corporations to change the way we consume news.

Kai And again, it points to a core difference between Google and Facebook in that respect. So it's interesting that they're being lumped together under this law. Google provides a new service. For Facebook, it doesn't really matter where stuff is coming from, whether it's from the New York Times, or your or my opinion or someone else's opinion. For them, it's only important what engages. And so they've decided, it's only 4% of the stuff that they put in front of people, and the move today to remove that from the platform just goes to show that they don't actually care about the kind of content, about the news, because they might not actually need it to drive their business model.

Sandra And it is important to again note that that business model will continue to influence the way news companies have to produce their news, regardless of whether or not they have the ability to monetise it.

Kai And we'll put a couple of links in the shownotes also of people who argue that the way in which the algorithms have foregrounded video content, for example, has had a big impact on reshaping journalism, and has actually led to job losses in the industry, and so on and so forth.

Sandra But this is very much an unfolding story, which I'm sure we'll pick up on season nine of The Future, This Week, starting soon.

Kai So we hope today we've given you some food for thought and some perspectives for how to think about what is very much an emerging story. But we'll be back soon with the season proper of The Future, This Week.

Sandra And that's all we have time for today.

Kai See you soon.

Sandra See you soon.

Kai Bye.

Outro This was The Future, This Week, an initiative of The University of Sydney Business School. Sandra Peter is the Director of Sydney Business Insights, and Kai Riemer is Professor of Information Technology and Organisation. Connect with us on LinkedIn, Twitter and Flipboard and subscribe, like or leave us a rating wherever you get your podcasts. If you have any weird and wonderful topics for us to discuss, send them to sbi@sydney.edu.au.